If you are keen on investing in a reputed and well-known investment management firm for some decent returns, then investing in Bridgewater could be a smart decision. Bridgewater is considered to be a leading investment management firm with a good reputation and track record. However, as is the case with all investment management firms, it would be better if you can find the right answers to the question as to how to invest in Bridgewater. This post is an effort to give our readers some useful tips that may help them to make the right decision when it comes to investing in investment management firms such as Bridgewater.
What makes Investment in Bridgewater So Special?
Bridgewater is perhaps the biggest hedge fund and it is trying to get even better. Hedge funds, from a common man's perspective, is nothing but an investment company. It makes use of money collected from clients and looks at alternative investments. The main objective of hedge funds being offered by Bridgewater is to ensure that their clients can get returns that are better than the market. In other words, they would like their clients to beat the market. Their other main objective is to make sure that they can provide a hedge to the clients against changes in the market that are unforeseen and even volatile.
Hence, before you get started with an investment in Bridgewater, please make sure that they have a diversified list of companies where the funds of clients are invested. This will reduce the risks and help you to gain a return that is better than what the market offers. Your objective, as a customer, should be to ensure that a loss in a few stocks or investments is made up by profits in others. The reasons customers continue to repose their faith in Bridgewater is because it is a huge investment management firm. It manages assets to the tune of a whopping $160 billion.
Choose Between the Best Funds
As a customer, you have the option of choosing from two of the main hedge funds of Bridgewater. They are All Weather and Pure Alpha. Both these hedge funds have earned the reputation of being in a position to beat the market reputation, year and after year. Though the best returns were seen in 2010 and 2011, the performances since then have been modest. However, it still continues to be better than most of the hedge funds and therefore thousands of customers continue to repose their confidence in these two hedge funds.
According to market experts, All Weather is doing better than Pure Alpha and when it is looked at as a combination, the average returns have been around 5.7 percent and this is quite decent and above average.
Be Aware that Hedge Funds have lock-in Periods
Hedge funds offered by Bridgewater are not the same as exchange-traded funds or stocks. Investors should keep this in mind. They will have to leave their investments for a certain period of time. Redemption is permitted only after the expiry of the lock-in period. A significant portion of the hedge funds invested by Bridgewater is into mineral exploration and real estate. While the returns may be good, they may not be as liquid as an investment in ETFs. ETFs can be converted into cash the same day. This is a point that should be kept in mind when one chooses between the two main hedge funds of Bridgewater.
Is investing in Hedge funds the right decision?
We need to bear in mind that private investment management firms offer a number of investment opportunities. We need to pick and choose the ones based on our specific needs and risk appetites. Investment products offered by Bridgewater are considered good because it combines reasonably good returns with a safety net in case something untoward happens in the market. Therefore if you are looking for an investment opportunity that has the right balance between risk mitigation and returns, then the hedge funds offered by firms like Bridgewater could be a good option.
Are Hedge funds right for all?
Not exactly, hedge funds are mostly preferred by high net worth individuals. They also make use of different strategies, have different sets of fees and the fund managers are capable of having a different strategy without creating panic amongst shareholders or investors.
Do they offer diversification?
Many people opt for hedge funds and other such products from Bridgewater because it gives them a chance to diversify their investments rather than putting everything in one basket. They may come with a higher risk compared to mutual funds, but many investors do not mind taking that risk because of better returns.
Conclusion
To conclude, investing in Bridgewater is mostly a wide decision provided you know the composition of their funds and the risks and possible returns that they may offer.
